Oil Edges Lower After Iran Opens Door to Diplomacy

The comments lifted broader risk sentiment, sending crude off its earlier highs. The pullback follows a run-up this week as the conflict escalated after the truce broke down.

Baghaei reiterated that Iran's position on the Strait of Hormuz is unchanged, calling the country's sovereign rights over the waterway "non-negotiable." The strait is a critical chokepoint for global oil shipments, and any disruption there could spike prices. The diplomat's insistence on that red line limits the scope for a quick diplomatic resolution, even as the mediation track remains active.

He also announced that Iran's interior minister will visit Pakistan later on Wednesday. The trip could signal further regional engagement, though the risk of additional escalation keeps oil underpinned. Traders will watch for any concrete progress from the mediation efforts or signs of further military action.